What we saw with Enron was the use of retirement funds for purposes other than retirement to the point where all of the Enron employees lost virtually all of their life savings. What we’re seeing in the budget right now is the use of Social Security money much like we used to do – a trillion and a half dollars over the next ten years of Social Security and Medicare dollars that will be used for other purposes, robbing really the trust fund of what we’re going to need when the baby boomers retire, holding them accountable in ways that I think is very irresponsible.

So I think that’s really the issue. There is a parallel there, and I think Senator Conrad is right to raise it.

JIM LEHRER: But what would the Democrats do differently with that money?

SEN. TOM DASCHLE: Well, obviously under the Clinton administration we didn’t use Social Security dollars. For the last three years we have not used one dollar of Social Security. In fact, you recall all of the budget debate we had with regard to lock boxes, people saying we should lock up every dollar of the trust fund.

In fact, if you go onto the White House Web page, the president– President Bush has a statement there that we’re not going to use a dollar of your Social Security Trust Fund’s money, and yet that’s exactly what this administration is doing. $1.5 trillion of Social Security money will be used under this budget.

JIM LEHRER: But what would you Democrats do with that money? You would not touch it at all to pay down the debt; you would just leave it there?

SEN. TOM DASCHLE: Well, what we would do-what we were planning to do is to pay down the debt so the money would be there for Social Security down the road. That was the original idea behind what the Clinton administration proposed and what most Democrats, in fact, what most Republicans as well said was the way we ought to ensure the viability of the Social Security and Medicare trust funds in the future.

JIM LEHRER: But of course the world has changed. We now have the war in Afghanistan, the war against terrorism, homeland defense. The president and his folks say this is the only way we can do this right now.

Do you have another way of doing it, in other words, paying for increases in defense spending and homeland security, and do all of these other things without using the Social Security fund?

SEN. TOM DASCHLE: Well, I would say two things to that, Jim.

First of all, I would say that for the most part the CBO will tell you that 45 percent of the reason we’re in a deficit over the next ten years is the tax cut, and the tax cut is what allowed us – or what caused the problem to a large extent – almost half of the deficit is caused by the tax cut over a 10 year period.

The second thing is if you’re digging a hole, the first thing to do is to quit digging. What we’ve got to do is not pass additional tax cuts. The president has proposed a permanent tax cut that will cost us $600 billion in the next 10 years, $4 trillion over the next 10 years following that just as the baby boomers are retiring. So, at the very least we shouldn’t make these tax cuts permanent, and thereby exacerbate the problem of the deficit even further.

JIM LEHRER: Do you want to repeal the present tax cut?

SEN. TOM DASCHLE: No. What I want to do is find ways to assure that we don’t use the Social Security trust fund and Medicare trust fund for purposes other than Social Security.

We don’t have the votes to repeal the tax cut. The president said over his dead body will we deal with any tax cuts that repeal in the coming months and so that’s not an issue that I think even ought to be on the table. The president’s made it clear; he’s got the votes. That’s not something that’s going to happen.

So let’s look at things we can do. It seems to me one of the things we should do is not make these tax cuts permanent and exacerbate the problem.

JIM LEHRER: But if I understand you correctly then, that is the only Democratic program, just to not pass more tax cuts?

SEN. TOM DASCHLE: Well, no. I think that there’s a lot of things. I was pointing out – you asked what should we do and obviously there’s an array of things that have to be done that I think ought to be examined more carefully.

We haven’t made any final decision with regard to the allocation of defense money, the allocation of homeland security dollars, how we’re working to spend the discretionary, domestic money that the president’s proposed in his budget.

So there’s a lot out there that we’re going to be looking at.

But clearly the $600 billion item that I think is one of the issues ought to be raised, ought to be debated, and hopefully ought to be avoided as one way of making the situation worse.

JIM LEHRER: Do you support the president’s proposal that some – what you call discretionary domestic spending beyond defense, beyond homeland security, either be capped or cut?

SEN. TOM DASCHLE: Well, the president is cutting very dramatically –

JIM LEHRER: Do you support that?

SEN. TOM DASCHLE: No, we don’t. We don’t support that. We don’t support the cut in childcare, the cut in job training, the cut in education, and some of the programs that they’d make.

So there’s a number of cuts that we’re very concerned about and ones that we’ll be talking about during the budget debate.

JIM LEHRER: But how do you have it all? How do you oppose him on not cutting the domestic programs, at the same time support him on defense and on homeland security and not go to Social Security?

How are you Democrats going to handle all of this– if you had –if you did have the vote? Let’s say you did have the vote. What would you do?

SEN. TOM DASCHLE: Well, Jim, I think you have to find offsets. That’s what we were trying to do in all of the budgets that the Clinton administration proposed; when they proposed additional spending, they proposed offsets to pay for them.

I’ll give you a good example. This week we’re going to be taking up the energy bill. The House passed a $34 billion energy cut in taxes for their – as part of their energy plan. We’re going to support an $18 billion cut in energy taxes, but it’s going to be offset. We’ll have the necessary offsets, including a custom user fee as one of the ways to offset that $18 billion cost. That’s the responsible thing to do. That’s how we ought to be addressing additional expenditures on this deficit. That’s find the offsets.

Let’s ensure that we don’t dig the hole deeper, and that is the difference between Democratic and Republican philosophies on this year’s budget.

JIM LEHRER: Speaking of difference of philosophy, Mitch Daniels, the president’s budget chief, said on this program a few days ago that really what you Democrats want is to raise taxes, that’s really – when it’s all said and done in order to do all the things that you want done, taxes are going to have to be raised.

SEN. TOM DASCHLE: That is the age old – I mean age old Republican mantra: Democrats want to raise taxes.

You’ll hear it as long as you and I are in this business. Nothing could be farther from the truth. What we want is responsibility. What we want is to ensure that the fiscal discipline we showed over the last three years can be maintained. This is an irresponsible way to approach our fiscal management.

To simply say we ought to go out there and provide more tax cuts without offsets is what got us into the trouble in the 1980s, and we’ve got a $4 trillion debt now to show for it. We don’t want to go back to those bad old days, and we’re hoping that we can find ways to avoid it.

JIM LEHRER: You’re use of the word “irresponsible” – are you saying the president is going about this in an irresponsible way?

SEN. TOM DASCHLE: Well, I’m saying that the budget in many respects is irresponsible budgetarily.

I’m not going to make any personal accusations here, but we can do better than this. We have to find ways to do better than this so we don’t do what we did in the 1980’s — rack up debt that we will be condemned to pay back for decades to come.

The problem is this time we won’t have those decades because baby boomers are retiring within the next 10 years. We had 20 years to worry about that in the 1980s.

JIM LEHRER: But, in a word, you can do all of these things and not rack up debt and not raise taxes too?

SEN. TOM DASCHLE: — but we’ve got to find ways to address these problems. They’re not going to go away simply because we ignore them. We raised the questions. We want to work with our Democratic and Republican colleagues to ensure we solve these questions before we, again, condemn this country to another 20 years of debt and fiscal irresponsibility that we can’t afford.

JIM LEHRER: Another subject, Senator. Was the president right to label Iran, Iraq, and North Korea as being an axis of evil?

SEN. TOM DASCHLE: I don’t think so. I think that it’s important for us to look at each of these countries, Jim, as threats to this country clearly, as problems that we’ve got to address clearly, but I think we’ve got to be very careful with the rhetoric of that kind.

We’ve already seen the moderates in Iran scramble to draw distance between “us” and “them,” and I think we’ve got to be very careful with how we approach all three countries.

He’s right in calling attention to the danger they pose to the United States. He’s right in calling for strategy. I would hope we could do it multilaterally and not unilaterally because I think that’s where we get into trouble.

JIM LEHRER: Iraq seems to be the place though where there might be the most imminent action, if any, coming. Do you think the case has been made for the United States to take action, military action against Iraq?

SEN. TOM DASCHLE: I don’t think it has right now. We have to be very concerned. We want to avoid at all costs the terror of 9/11. If they’re building weapons of mass destruction, we’ve got to deal with it.

But I don’t think the case has yet been made. We still have a major job to do with phase one of the war on terror. We still haven’t found bin Laden. We still haven’t found Mohammed Omar — we haven’t found a lot of those in al-Qaida around the world that have to be found in order to deal with that level of terror, so I think we’ve got to take first things first.

The president hasn’t called for any military action, and I think that’s exactly right; we shouldn’t at this point.

JIM LEHRER: Do you expect as Senate Majority Leader to be consulted before there would be military action against Iraq?

SEN. TOM DASCHLE: Absolutely. I don’t think there’s any question that it’s important for Congress to be full partners; we need to be involved not only in consultation but in decision making, and I would hope that that would happen.

JIM LEHRER: There have not been any preliminary conversations about this?

SEN. TOM DASCHLE: There have not, no.

JIM LEHRER: On Enron, there’s been increasing criticism of the way Congress is going about these many investigations. It seems like every subcommittee and committee in the House and Senate is figuring out a way to hold a hearing.

And the criticism is there’s an awful lot of confusion, an awful lot of people fighting for the spotlight or whatever. What’s your view of how you all are doing there?

SEN. TOM DASCHLE: Well, Jim, I think we’re doing quite well, frankly. And I think both the House and the Senate are taking their responsibility very seriously.

I think that it’s important for those committees, the areas of expertise that are relevant here, have the hearings, ask the right questions, and try to find the answers, and try to identify the policies that will allow us to avoid this from happening again. That’s what Congress does, and I think, at least to date, the American people are supportive and very appreciative.

JIM LEHRER: Why did you all opt not to do the Watergate route or the Iran-Contra route, in other words, to put together a select committee to go– just one committee to do the whole nine yards?

SEN. TOM DASCHLE: Well, in part, because I think the committees are doing the right things. They are doing what we need to do to get to the heart of what these issues are all about. We have specific areas of responsibility and expertise that I think are the strength of the current committee’s system.

We want to weigh on those strengths and use those strengths in our efforts to get the facts and make some decisions with regard to future public policy. I don’t that any generic committee, any Watergate type committee at this point will allow us to do any better job.

JIM LEHRER: Last week, Senator Robert Byrd (D-W.Va.) And Treasury Secretary O’Neill exchanged some unusually harsh and some would suggest insulting words at a Senate hearing.

What’s going on there between them?

SEN. TOM DASCHLE: Well, I think emotions are very high. I think that any time you get into some of these issues you have people that feel very strongly about their position, strongly about — in Senator Byrd’s case — the institution that he’s here in part to protect. He feels strongly about the prerogatives of the United States Senate.

I think the challenges to those responsibilities as Senators are challenges he takes very seriously and you saw that play itself out last week.

JIM LEHRER: Do you defend Senator Byrd and what he did?

SEN. TOM DASCHLE: Absolutely.

JIM LEHRER: And you think Secretary O’Neill was out of line?

SEN. TOM DASCHLE: Well, I’ll let others make that decision. I think he again expressed himself strongly, as is his right.

He feels that there are certain things that ought to be changed, and he articulated those feelings last week. I don’t know that there’s a right and wrong. I just strongly believe that Senator Byrd was well within his rights to express himself and to make sure that people understood his position.

JIM LEHRER: Finally Senator, yesterday you said you were going to oppose the nomination of Federal District Judge Charles Pickering – nominated to go to the Circuit Court of Appeals in New Orleans.

He’s from. He’s a close friend of Senator Lott that you’re going to oppose the nomination. Why?

SEN. TOM DASCHLE: Well, because I don’t think that Mr. Pickering is qualified at this point. I think that there are some very serious questions about his ability as well as his background and it causes me concern.

So while I certainly believe he has every right to be – to have his case heard, for a vote to be taken, unlike our Republican colleagues, who would sit on nominations for years, we’re going to have a vote in committee, and if it reaches the floor on the floor, but when that vote is cast, I’ve made the decision to oppose his nomination.

JIM LEHRER: It has to do with what he has done as a federal district judge or what he did earlier as a state senator, or what?

SEN. TOM DASCHLE: Well, I think a combination of things, Jim. I’ll have a lot more to say about it as the nomination comes to the floor, if it does, but I believe that we can do better than that, and I’ve expressed myself in that regard.

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